Patriot Transportation - Q2 2023
May 9, 2023
Transcript
Operator (participant)
Good day, everyone. Welcome to the Patriot Transportation Holding, Inc. earnings call for second quarter. At this time, all participants have been placed on a listen-only mode, and we will open the floor for your questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, Rob Sandlin, CEO and President of Patriot Transportation Holdings. Sir, the floor is yours.
Rob Sandlin (President and CEO)
Good afternoon, and thank you all for being on the call today and for your interest in Patriot Transportation. I am Rob Sandlin, CEO of Patriot Transportation. With me today are Matt McNulty, our Chief Financial Officer and Chief Operating Officer, and John Klopfenstein, our Chief Accounting Officer. Before we get into our results, let me caution you that any statements made during this call that relate to the future are by their nature subject to risks and uncertainties that could cause actual results and events to differ materially from those indicated by such forward-looking statements. Additional information regarding these and other risk factors and uncertainties may be found in the company's filings with the Securities and Exchange Commission. Now for our second quarter results.
Today, the company reported a net income of $475,000 or $0.13 per share for the quarter ended March 31, 2023, compared to a net loss of $490,000 in the same quarter last year. Operating revenues for the quarter were $23,465,000, up $2,537,000 from the second quarter last year due to rate increases, higher fuel surcharges, increased miles, and an improved business mix. Miles this quarter increased 97,000 miles over last year's quarter, mainly due to an improving driver count. Operating revenues per mile was up $0.40 or 10.2% versus last year's quarter.
Compensation and benefits increased $2,081,000, mainly due to increased driver compensation through the increased driver compensation package, including an increase in driver training pay of $211,000 versus the same quarter last year, and an increase in owner operators. Depreciation expense was down $107,000 in the quarter, and gains on sale of equipment was $275,000 compared to a $119,000 gain in last year's quarter. The operating profit this quarter was $584,000 compared to an operating loss of $639,000 in last year's second quarter. Now for the six-month results.
The company reported net income of $960,000 or $0.27 per share, compared to $5,949,000 in the same period last year, which included $6,281,000 from gains on real estate, net of income taxes. Operating revenue for the period were $46,315,000, an increase of $4,816,000 due to rate increases, higher fuel surcharges, and an improved product mix. Operating revenue per mile was up $0.53 or 13.8%. Miles for the period were down 202,000 miles versus last year's period, mainly due to closing of our Nashville terminal last year.
Compensation and benefits increased $3.202 million due to the increases in driver compensation, including a $296 thousand increase in driver training pay versus last year's period and increases in owner operators. Fuel expense increased $440 thousand for the period. Insurance and losses decreased $756 thousand due to lower health and risk claims, and depreciation expense was $310 thousand lower versus the same period. Gains on equipment sales was $341 thousand compared to $479 thousand in the same period last year. SG&A increased during the period $406 thousand, due mainly to bonus accrual, increased travel, and higher 401(k) match.
Operating profit was $1,204,000 compared to $7,902,000 for last year's six months. Prior year gain on real estate was $8,330,000 due to the sale of our Tampa terminal and lands. For the summary and outlook. In the first half of our fiscal 2023, we added business with new and existing customers on the back of a higher driver count and increased our miles quarter-over-quarter, over prior-year quarter for the first time in several years. We also have new business opportunities booked going forward into the third quarter and will continue to focus our growth with new and existing customers that meet our stated goal of adding business that will improve our return on investment.
We had $6,941,000 of cash at the end of the first quarter, the end of this period, with no outstanding debt. We will add 73 new tractors during our year. 44 of the tractors will replace our existing company fleet and 29 will replace leased tractors with company-owned tractors. We believe replacing the 29 leased tractors with company units will provide a better financial result and is a good use of cash. We continue to focus on our driver hiring and retention. While the driver hiring market is still very challenging, our driver count increased during the second quarter, which allowed us to add miles throughout the period.
This comes at a cost, as shown earlier, with $296,000 of added driver training cost compared to the prior year. The added capacity is encouraging for our plans to grow miles in revenue. Due to the previous driver pay increases, turnover results have been lower among our drivers with a year or more of seniority. New driver acquisition, while improved, continues to result in high turnover, but with better results than this time last year. The trend of general freight spot rates declining has allowed us to add more owner-operators in several markets, and we will continue to monitor and balance with company drivers.
In closing, our safety goals are on target for the year with the exception of product mix, and we will continue our efforts to keep preventable incidents and related expenses in check while also staying focused on quality customer service. We believe we are positioned well to take advantage of the seasonal volume increases along with committed new business that I mentioned earlier. Thank you again for your interest in our company, and we will be happy to entertain any questions.
Operator (participant)
Certainly. At this time, we'll be conducting a question-and-answer session. If you have any questions or comments, please press star one on your phone at this time. We do ask that while posing your question, please pick up your handset if you're listening on speakerphone to provide optimum sound quality. Once again, if you have any questions or comments, please press star one on your phone. Please hold while we poll for questions. Your first question is coming from Martin Lorenzen. Your line is live.
Speaker 8
Hey, good evening. Longtime listener, first-time caller here from Europe. Thank you for taking my questions.
Rob Sandlin (President and CEO)
Sure. Thank you.
Speaker 8
Can you remind investors about your PP&E item on the balance sheet, and particularly, how much of that is related to terminals? How many terminals are left, and how do you think about that asset base?
Matt McNulty (CFO and COO)
To break out how much of that is related to the terminals would take a little bit of time. As far as how many terminals we have left, we've got 17 terminals, terminal locations currently. I think that's down from 21, you know, if you went all the way back to five, six years ago when we first had our terminal closure in Birmingham.
Speaker 8
Okay. What would you say is the economic benefit of you owning that infrastructure?
Matt McNulty (CFO and COO)
Well, I mean, a lot of it is that we don't experience any real expense from it, and we've owned those properties, most of those properties going back, you know, 50 years, let's just say as a, as an example. A lot of it has been depreciated. There's not a lot of cost to us in owning those facilities other than the maintenance, versus if we were to go out and lease properties today, it'd be extremely expensive.
Speaker 8
Yeah, that makes sense. Yeah, certainly. If you, if you compare the existing ones, the last, 17 ones to the, one that's being sold or that was sold to Amazon, would you say, the economic value is comparable or just-
Matt McNulty (CFO and COO)
No.
Speaker 8
Just very broad?
Matt McNulty (CFO and COO)
Yeah, no. That property was extremely unique as far as the rest of our properties go. The rest of our properties are. There was a lot of excess land, and it was in a place in Tampa that it has extremely high property values, a place known as South Tampa. We don't have anything like that left. Everything else in our network is relatively smaller properties in industrial type areas. I mean, they've got value because obviously even industrial properties are limited in most cities, but there's nothing like that left in our network.
Speaker 8
Okay. thank you for the clarification. Lastly, just a little bit more longer term, how do you think about smaller acquisitions? I can only imagine that there's some distress in smaller mom-and-pop shops, given the current workforce environment and, the cost inflation.
Rob Sandlin (President and CEO)
Sure. I think this is Rob. Good question. We are continuously being sent acquisition opportunities, and we've looked at a number of them. We've taken a shot at one or two small ones, and we'll continue to do that. Ours will be a focus on an acquisition that's a good strategic acquisition or a bolt-on that makes good, that's going to provide something accretive to the shareholders and some return on investment. A couple of them we've looked at probably went for higher prices than we would have been willing to pay. We just have to kind of walk away from those. It's something that's part of what we do, certainly on a monthly basis.
Matt McNulty (CFO and COO)
To add on to that, mostly what we'd be looking for there is to try to get some diversification out of an acquisition. That's not the only thing, but that would be a primary item we'd be trying to do through acquisition.
Speaker 8
All right. That's certainly encouraging. Thank you, gentlemen. Thank you.
Rob Sandlin (President and CEO)
Great.
Matt McNulty (CFO and COO)
Great.
Rob Sandlin (President and CEO)
Thank you. Thanks for the question.
Operator (participant)
Thank you. Your next question's coming from Christian Olesen from Olesen Value Fund. Your line is live.
Christian Olesen (Fund Manager and Managing Member)
Thank you.
Matt McNulty (CFO and COO)
Hey, Chris. Hi there. How are you?
Christian Olesen (Fund Manager and Managing Member)
We're good.
Wanted to see if you can give us an update on where you're at at this point in your conversations with your customers about pricing. Are there any
Relationships left where you think you really need to meaningfully improve the pricing in order for that relationship to really make sense for you? Would you say that you're really back to just normal ongoing price increases at this point?
Rob Sandlin (President and CEO)
I think we're somewhat back to normal. Some of that will depend on what opportunities present themselves and how future negotiations go. I think the way I'd generally answer that is I think we've done most of the heavy lifting, with regard to partnering with the right, with the right companies, and that continues to pay off, and that's where a lot of our growth is coming from. understanding that, you know, those are typical and typically at least annual increases. They'll start to roll around again, some of them in the summer and in the fall, we'll get back through the early part of the year again.
Christian Olesen (Fund Manager and Managing Member)
Okay, thanks. That's helpful. How would you characterize the competition out there in general?
Rob Sandlin (President and CEO)
One, I would tell you that there's not a lot of excess capacity in the marketplace. There feels like there is slightly more than there was, say, a year ago, but not to the extent to where a surge and even a small surge in demand or any kind of disruption, creates a real problem. Although we just had flooding in South Florida, and it took that market a couple of weeks to get caught back up. I wouldn't tell you that there's a lot of excess demand out there. I think the same things that we're talking to you about, as maybe a little bit of easing in the ability to get some drivers hired and owner-operators has happened, but nothing on just a large scale. I think everybody's probably mostly in the same position.
Christian Olesen (Fund Manager and Managing Member)
Yeah. I also meant in terms of, the pricing, the rates, is that, you know, how would you characterize the competition, there?
Rob Sandlin (President and CEO)
Well, it's hard for me to speak for what the competition's doing on pricing, except that I will tell you, we've told you guys, as we've gone along and we've raised driver pay, and we've raised our freight rates significantly over that same period of time. I think if the competition wasn't doing the same thing, then we would have lost business by now. We really haven't seen that happen. If anything.
Christian Olesen (Fund Manager and Managing Member)
Added.
Rob Sandlin (President and CEO)
We've added business and our partnerships have improved. That should be a little bit of an indication of what's going on in the market.
Christian Olesen (Fund Manager and Managing Member)
Okay, great. Thank you very much.
Rob Sandlin (President and CEO)
Uh-huh.
Matt McNulty (CFO and COO)
Great.
Operator (participant)
Thank you. Your next question is coming from Steven Dennis. Your line is live.
Steven Dennis (Shareholder)
Hi. I'm a shareholder.
Rob Sandlin (President and CEO)
Hey.
Matt McNulty (CFO and COO)
How are you?
Rob Sandlin (President and CEO)
Thank you.
Matt McNulty (CFO and COO)
Hey, Steven.
Rob Sandlin (President and CEO)
Good.
Steven Dennis (Shareholder)
I live in Sarasota, Florida. I like seeing our products. Where would I go to see our trucks? In action, in action.
Rob Sandlin (President and CEO)
Well-
Matt McNulty (CFO and COO)
The best place is to go to the Port of Tampa to watch our trucks coming in and out of there. If you wanted to see them in action, I would just follow them out of there to a station. That's just that.
Rob Sandlin (President and CEO)
You as a shareholder, if you'd like to go watch a driver, you can't really watch them load. You can pull into the port facility and see what the port facilities look like. If you want to call me, I would be glad to arrange for you to go watch one of our drivers unload with one of our management.
Steven Dennis (Shareholder)
I'd like to do that. Can I see something in Sarasota, or I have to go to Tampa?
Rob Sandlin (President and CEO)
We've got Sarasota, Clearwater, St. Pete stuff, so we can find something close to you.
Steven Dennis (Shareholder)
Okay. Gonna do that.
Rob Sandlin (President and CEO)
Yeah, reach out to Matt or me.
Steven Dennis (Shareholder)
Okay
Rob Sandlin (President and CEO)
... either one, and we can help arrange that. I think you can do that.
Steven Dennis (Shareholder)
Very good. I like doing that. I like to make sure we're there.
Rob Sandlin (President and CEO)
I think it'd be good. It'd be educational for sure.
Matt McNulty (CFO and COO)
Yeah, you can reach out to me. I'll get you set up.
Steven Dennis (Shareholder)
Okay. I'm gonna call Matt.
Matt McNulty (CFO and COO)
Yes.
Rob Sandlin (President and CEO)
Okay.
Matt McNulty (CFO and COO)
That sounds good.
Rob Sandlin (President and CEO)
Perfect.
Steven Dennis (Shareholder)
Thank you.
Rob Sandlin (President and CEO)
Thank you.
Matt McNulty (CFO and COO)
Thank you.
Operator (participant)
Thank you. Your next question's coming from Steve Rudd from Blackwall. Your line is live.
Steve Rudd (Private Investor)
Hey, guys. Sorry, I missed the last conference call. No interest in seeing the trucks load and unload, but it sounds like that's a fun day. I'm curious, on our driver count, is it now at 380? I know you mentioned in the press release an add of 30. Does that bring us to 380 approximately as of today?
Rob Sandlin (President and CEO)
Yeah, I don't mind telling you, we're at 387 as of today.
Steve Rudd (Private Investor)
Okay.
Rob Sandlin (President and CEO)
That's revenue producing drivers and we've got more drivers in training.
Steve Rudd (Private Investor)
No kidding. That's a net increase of 37 drivers approximately versus year-end. Is that about right?
Matt McNulty (CFO and COO)
What was the last part of the question, Steven?
Steve Rudd (Private Investor)
Sure. like, when I look at the incremental 37 or so drivers, did they come on since January one? Since March, you know, 31? I mean, when did most of those come on?
Matt McNulty (CFO and COO)
Yeah. I would say, yeah, John's right. I mean, that's from October 1 forward, but the bulk of those folks really started to increase in January.
Rob Sandlin (President and CEO)
January.
Matt McNulty (CFO and COO)
February
Rob Sandlin (President and CEO)
that is most of that is since the bulk of that is since January, and a lot of that happened in February and March.
Steven Dennis (Shareholder)
In this month.
Rob Sandlin (President and CEO)
In this month, going forward into April.
Steve Rudd (Private Investor)
Wow. Wow. Wow. Now of those, this is getting very impressive. Now, of those, you know, it tells us most of that number is not in our revenue number for this quarter. It sounds like you've got more coming on. What's bringing about the more? Is it through these training programs, or... I know it's a combination, but...
Rob Sandlin (President and CEO)
Right.
Steve Rudd (Private Investor)
Give me an idea of, like, what, how many... Yeah, go ahead.
Rob Sandlin (President and CEO)
I think it's two... it's a few things. 1, certainly the driver pay increases that we've done have helped us with our retention levels and those drivers that have been here for a while. The newer drivers' pay is up, I think that's helped. We changed a few things in our recruiting process and conversations to try to get drivers in the door a little quicker because some of the things that we were asking them, we felt like were just waste of time because we could find those things out later. We've really kind of gone through the whole process top to bottom, and we think all of those things are helping.
I think from the owner-operator standpoint, we're certainly, we've certainly increased them as well. I do think that the freight market out there, albeit in the port cities, it's tougher. The freight market and the fact that the general freight prices, not our freight prices, are down, some of those owner-operators have had to move on to something else. You may know, all those used trucks they were buying over the last couple of years were very high priced, and so they've got to have good freight to be able to pay for those things.
Steve Rudd (Private Investor)
When we bring on owner-operators, compared to employees, in the past, I've used as a operating, in terms of incremental revenue per driver or I'm sorry, profit per driver, I've used as a ballpark of about $50,000 or netted out about $0.01 per share. In the owner-operator situation, are we at a lower margin? Because I've never quite understood how they.
Rob Sandlin (President and CEO)
I think from our perspective, whatever the number is, we feel like the incremental benefit to the owner-operator is similar to the company driver.
Steven Dennis (Shareholder)
To us.
Rob Sandlin (President and CEO)
To us.
Steve Rudd (Private Investor)
Oh, to you guys.
Rob Sandlin (President and CEO)
Right.
Steve Rudd (Private Investor)
How many more drivers? I know it's a tough question, but you guys clearly have hit the right formula, the market's hitting right, and, you know, these guys who bought the, you know, they've got to get work now that they bought those expensive vehicles. What do we think our count? Does it continue to go up? I mean, these are staggering numbers, quite frankly.
Rob Sandlin (President and CEO)
I mean, our plan would be to continue the incremental growth of the drivers. I mean, we've, for lack of a better way of saying it, we've created a internal target of 400 drivers. Now, when we get to 395, we'll create a new target and determine what that is and where that is. Some of the markets will top out. Some of the smaller markets where we will only be looking for drivers to fill a spot if somebody leaves.
Steve Rudd (Private Investor)
Hmm
Rob Sandlin (President and CEO)
because we're not gonna be able to grow a lot in some of those markets. There's other markets where we can still grow, and there's other segments where we could still grow within some of those small terminals that are predominantly petroleum, and we start talking about dry bulk business and some of the chemical and some of the other things that we're working towards. I think we'll continue to see incremental driver growth as long as we're able to get to hire them and keep our turnover moving the same direction. We will change our plan as we go, but I would tell you we'd continue to try to grow the driver force.
Steve Rudd (Private Investor)
Okay. now I just wanna talk about the price increases. We should be able to put forward some additional pricing in summertime and fall as these contracts roll, I mean.
Rob Sandlin (President and CEO)
There's a few-
Steve Rudd (Private Investor)
Yeah.
Rob Sandlin (President and CEO)
There's a few things that roll in the summer. The heaviest part of the lifting in numbers of customers is in the fall. We've got some others that roll on some larger accounts into the early part of the calendar year. I would say your biggest impact is gonna be towards fall to early part of 2024, first couple months of 2024.
Steve Rudd (Private Investor)
Okay.
Rob Sandlin (President and CEO)
Beyond what we've already accomplished this year.
Steve Rudd (Private Investor)
All right. Understood. I guess the next question I have is, let's talk a little bit about our, I don't know if I could call it new business, but, you know, the dry bulk and the other product that we're picking up. What, what, % of our company now is hauling that stuff versus, you know, what we deliver to the gas station?
Rob Sandlin (President and CEO)
I think in the queue, we'd say that petroleum is 85% of our business. I wanna be sure we said this correctly. We have added new business in the petroleum side as well. Our plan is to continue growing all of those segments where it makes sense for us to do that. Our plan, as we've talked about before, is to continue to try to diversify with the dry bulk and the chemical. If we continue to be able to grow petroleum at prices that make sense for us and we can hire the drivers, we'll continue to do that as well.
Steve Rudd (Private Investor)
Okay. All right. I mean, you know, You guys have consistently, and I think I'm in for two years or three years now, I don't remember. I can look back, but you've consistently run this business extremely well, and right now it feels like we're hitting it on all cylinders, and we're hitting it on driver count, we're hitting it on pricing, and also top-line growth from customers. Is that a fair statement?
Rob Sandlin (President and CEO)
That's.
Matt McNulty (CFO and COO)
We feel good.
Rob Sandlin (President and CEO)
Yeah.
Matt McNulty (CFO and COO)
about the direction and the metrics that you rattled off, that we're continuing to see the things we care about or that move the needle the most are improving this year.
Rob Sandlin (President and CEO)
Right. Yeah.
Steve Rudd (Private Investor)
Go ahead, Rob, I'm sorry. Is that right?
Rob Sandlin (President and CEO)
Yes.
Steve Rudd (Private Investor)
Right. All right. Should I offer to take everyone to Disneyland? Only joking.
Matt McNulty (CFO and COO)
We don't like California.
Rob Sandlin (President and CEO)
We'll figure it out, yeah.
Steve Rudd (Private Investor)
We can find out what Mickey and Minnie are really up to. Get to the bottom of that. What do you think? It's important, right?
Rob Sandlin (President and CEO)
Yeah.
Steve Rudd (Private Investor)
Hey, listen, I wanna thank you guys as I always do, but really this is awesome news.
Rob Sandlin (President and CEO)
Thanks.
Steve Rudd (Private Investor)
You know, many, many thanks, and I'm sure we'll be talking as we proceed.
Rob Sandlin (President and CEO)
Yep. I appreciate you.
Matt McNulty (CFO and COO)
Thanks.
Steve Rudd (Private Investor)
Bye.
Operator (participant)
Thank you. Your next question is coming from John Koller from Oppenheimer Close. Your line is live.
John Koller (Partner)
Yes. Hi, good afternoon, gentlemen.
Rob Sandlin (President and CEO)
Hello, John. How are you?
John Koller (Partner)
Hey. I'm all right, thanks. Congratulations. Reiterate that I think you guys are doing a great job. My questions relate more to CapEx. Based on the figures that I'm pulling out here, it looks like barring equipment sales, you might have to borrow a little bit of money towards the end of the year. Am I reading that right?
Matt McNulty (CFO and COO)
No. Our forecast would have us end the fiscal year in a similar position to where we are now cash-wise.
John Koller (Partner)
Okay. I guess I was thinking that the CapEx was gonna be. Okay, maybe I misread the press release then. The second question then it relates to, as you hire, get your driver counts up, I think you have enough trailers and tankers. Do you have enough? Obviously, you'll need a little more tractors, do you think your CapEx budget then going forward will be similar to this current year?
Rob Sandlin (President and CEO)
Well, I think-
John Koller (Partner)
Do you think it'll be different?
Rob Sandlin (President and CEO)
John, I think the thing you gotta pull out going forward is the 29 leased tractors that we're replacing this year. One, on tractors on a replacement cycle, we'll get back to a more normal 10 trucks a quarter, and just in round numbers.
John Koller (Partner)
Okay.
Rob Sandlin (President and CEO)
Once you get that. This one year, we had to replace those 29 leased tractors, and we felt like in our analysis, that doing that with cash and doing it with company trucks was the right answer. On a go-forward basis, we have the trailers that we need to grow on the petroleum side of the business. We have some growth ability on the dry bulk side of the business. If we saw a big chemical opportunity, we would have to probably go out and buy some equipment. Right now, the focus is not really to do that. I think we're in pretty good shape on the trailer side.
What we have historically done is if we need, as these replacement tractors come in and we need capacity, truck capacity, we will pull two, three, four, five, 10 of those trucks that are coming in, continue to run the older trucks, and then we would order trucks for to buy later to fill that driver number. We're not gonna do a speculative purchase of what I would call expansion tractor capacity, as long as we have trucks coming in on a regular basis.
John Koller (Partner)
Okay.
Matt McNulty (CFO and COO)
The one thing-
John Koller (Partner)
Okay
Matt McNulty (CFO and COO)
you always gotta keep in mind in our business in particular is we try to, if we don't do it everywhere, slip seat all of our petroleum trucks. There's always some capacity in the slip seat side where you've got a single shifted tractor you're hiring into his shift partner.
Rob Sandlin (President and CEO)
That's a focus right now as we've added to this driver count, is to continue to push that utilization up.
Matt McNulty (CFO and COO)
Right
Rob Sandlin (President and CEO)
... on that, on the trucks that we have.
John Koller (Partner)
Do you have a lot more room in the utilization side, or do you have certain amount of downtime you need for repairs and maintenance kind of stuff?
Rob Sandlin (President and CEO)
I wouldn't say we have a lot, but we've got... I think we've got enough to get us to the 400 driver mark or so. Depending on the type of business, give you an example, the dry bulk business is typically one driver, one truck. If you're growing that business, you might need more trucks than if we were growing a piece of business in a terminal where we could go from 1.25 or three drivers per truck to 1.5. It just depends on what we're adding, but there's some room there.
John Koller (Partner)
Okay. That's great. All right. Thank you very much.
Rob Sandlin (President and CEO)
Yes, thank you.
Matt McNulty (CFO and COO)
Great. Thank you.
Operator (participant)
Thank you. Your next question is coming from John DeJager. Your line is live.
Speaker 9
Hello, everyone.
Rob Sandlin (President and CEO)
Hello, John.
Matt McNulty (CFO and COO)
Hey, John.
Speaker 9
Hey. Just following up on the diversification question. You're talking about diversifying product, right? Not geography in terms of potential-
Rob Sandlin (President and CEO)
Right.
Speaker 9
-acquisitions.
Rob Sandlin (President and CEO)
Our, to be specific, what we would like to do is to have one of our existing terminals that already has management and dispatch, and maybe it's predominantly a petroleum terminal. Then diversify that into water like we have in a couple of our terminals, dry bulk. If we've got 25 drivers in a market, and we can add five drivers about of dry bulk to that particular terminal, then we're able to utilize that same facility, the same dispatch staff and management staff. Really the only thing we're adding is drivers and the capacity to haul the loads.
Speaker 9
Okay. That makes sense. In terms of the miles driven, what's the goal for the full year, would you guess, 21, 22 million miles?
Matt McNulty (CFO and COO)
Yes. Roughly, yes.
Speaker 9
Okay. 20-what?
Matt McNulty (CFO and COO)
28, twenty-
Rob Sandlin (President and CEO)
Last year was-
Matt McNulty (CFO and COO)
2022 was probably what I would have in my head as our target.
Speaker 9
Okay, 22. Several years ago, the miles driven were, you know, 43, 44 million. I know you've, you know, walked away from customers. You've closed some terminals. What would be a reasonable target for miles driven to normalize at as we go forward?
Matt McNulty (CFO and COO)
Right kinda right where we are.
Rob Sandlin (President and CEO)
Yeah. I think that's a hard one for us to answer because, you know, we're just coming out of a market where it was next to impossible to add driver capacity. We're kind of feeling our way through what are we able to do on a grassroots basis. I've said it forever, it's one driver, one truck at a time. If we can ship the truck, then it's two-
Matt McNulty (CFO and COO)
Two drivers.
Rob Sandlin (President and CEO)
... two drivers, one truck at a time. We wanna get a little better feel for this driver hiring market and retention. Hopefully, it continues in the direction that it's going now. You know, it would be our goal to continue to add miles. I would probably not wanna speculate right now on what a target is because we really haven't had those internal conversations.
Speaker 9
Okay. In your markets, are people back to driving at levels pre-pandemic, or are people working from home? I mean, obviously they probably are, but, you know, what's that dynamic like at this point coming out of the pandemic?
Rob Sandlin (President and CEO)
I think we're getting ready to go into the summer busy season. We didn't see, frankly, we didn't see the surge, the typical surge of business in the Central and South Florida market that you would see in during the springtime. I don't know if that's partly because the Europeans aren't traveling. I just don't know exactly what that was. I'm out on the roads every week, and it feels like the traffic's back. If you go through Atlanta, it doesn't take you long to figure out that the traffic's back. Tampa's the same way. We're anticipating a pretty busy summer season.
Speaker 9
Okay.
Rob Sandlin (President and CEO)
That's probably my best way to-.
Matt McNulty (CFO and COO)
The people working at home spend more time driving than the people that go to work. Yeah. It's just at different times of the day.
Rob Sandlin (President and CEO)
Yeah.
Matt McNulty (CFO and COO)
I mean, as in particular, you know, we've got a customer who's got stores in Jacksonville.
Rob Sandlin (President and CEO)
Right.
Matt McNulty (CFO and COO)
Over the last two years, they've consistently been 5%-8% below what they were pre-COVID, for whatever that drives that. People working from home would be my guess.
Speaker 9
Hmm.
Matt McNulty (CFO and COO)
In other places, they're at the same levels that they were before, like in Atlanta.
Rob Sandlin (President and CEO)
Right.
Matt McNulty (CFO and COO)
We're not really seeing... That's a little bit odd because I would think you'd have more people working from home in a place like Atlanta. To [jonslash], I still think they're out driving around.
Speaker 9
Okay. All right. Good. That's encouraging.
Rob Sandlin (President and CEO)
Great.
Speaker 9
Thanks so much for the answers.
Rob Sandlin (President and CEO)
Thank you very much.
Speaker 9
Yep.
Rob Sandlin (President and CEO)
Thank you.
Operator (participant)
Thank you. Once again, everyone, if you have any questions or comments, please press star then one on your phone. Your next question is coming from Bruce Orlicke from Oppenheimer. Your line is live.
Bruce Orlicke (Analyst)
Congratulations guys, on an excellent quarter.
Matt McNulty (CFO and COO)
Thank you, Bruce.
Rob Sandlin (President and CEO)
Thank you.
Bruce Orlicke (Analyst)
One of the questions I wanna ask you, can you go over if there's like, some seasonality to your earnings? Like what would be considered our strongest quarter?
Rob Sandlin (President and CEO)
Typically, John, Matt, correct me if I say this wrong, typically, the quarter that we're in from a, from a business level and seasonality of business would be our third quarter, and then it starts to tail off a little bit towards the end of the fourth quarter as schools have started going back in a little bit earlier. Say late August and September aren't quite as robust as they used to be. When you look at this summer month, we would expect to see... Obviously, revenues should indicate earnings, right? I would think that the summer should be really strong because that's historically your best. March is typically a really good month, as I said a few minutes ago, we just didn't see the Florida season take off as much as it normally has in the past.
Hopefully, that answers the question.
Matt McNulty (CFO and COO)
We still had a strong March.
Rob Sandlin (President and CEO)
Yeah.
Matt McNulty (CFO and COO)
Just probably a little lighter than we would've thought. Yeah, March kinda begins the season, and it starts in South Florida, and then as the summer comes on, it moves up more to the north and, you know, our Tennessee and Georgia markets really start kicking in the summer.
Bruce Orlicke (Analyst)
The third quarter should be our strongest. How would you like to have it anticipate, let's say, the fourth quarter in short, in ranking the quarters, if you can?
Rob Sandlin (President and CEO)
Yeah. I'd say it's probably similar to the spring quarter in business levels.
Matt McNulty (CFO and COO)
Maybe a little-
Rob Sandlin (President and CEO)
Maybe a little stronger in the very beginning. Kind of the opposite. The January, February. January, February is a little slow. March is really good. July, August are usually pretty good, and it starts to tail off at the end of August, and September tails off. I'd say those are probably pretty similar with the fall being the least of the four from that perspective.
Bruce Orlicke (Analyst)
You made a comment about the commitment of new business in the third quarter, and I was just curious to know to get a familiarity with your customers. Is there any way you can discuss possible new business or existing customers that you have?
Rob Sandlin (President and CEO)
Yeah, I would hesitate to name customers for a lot of reasons. Here's how I would think I would answer that question. We are focused on our customer base that we have been growing with and talking about partnering, doing a true partnership with. As they grow their business, typically what happens is new opportunities present themselves, whether that's a new station, a new truck stop, somebody decides that they want to move a little bit of their capacity and offer that to us, a month out or two months out. That's when we say that we've got commitments on business, it would be those sort of commitments. In most cases, I would say in all those cases right now, it is folks that we're already in partnership with.
Bruce Orlicke (Analyst)
The other question I wanted to ask you is that when I look at your stock, it is quite unbelievable that I really believe the stock is significantly undervalued. At today's current prices, you're probably looking at a market cap of about $30 million, which means that in the first half alone, first six months, we're selling under 1 times revenues for a half a year, and we have no debt. My question really is, and I realize we're a micro-cap stock. My question is: What does the company plan to do on an investor relations front to get out this great story?
Rob Sandlin (President and CEO)
Good question, Bruce. I think we had with the period of time that we've gone through and with our earnings not doing so well, we had kinda stepped away from that. We've had some recent discussions about getting back out there and talking with potential investors and investors about the story that we have going. Let me get back with you on that, really. We're aware that that's probably something we need to do. We haven't up until recently felt like that was in our best interest, but now as we start to do a little better, I think maybe we've got something we could talk to people about.
Bruce Orlicke (Analyst)
Thank you very much, and I found this call, you know, quite informative, and I wish you good luck. Again, excellent quarter.
Rob Sandlin (President and CEO)
Thank you. Thanks for your interest.
Operator (participant)
Thank you. That concludes our Q&A session. I'll now hand the conference back to our host for closing remarks. Please go ahead.
Rob Sandlin (President and CEO)
Thank you all. We appreciate your interest in Patriot Transportation. We look forward to talking with you next quarter. Have a great day.
Operator (participant)
Thank you, everyone. This concludes today's event. You may disconnect at this time and have a wonderful day. Thank you for your participation.